With shutdowns and layoffs looming throughout the year, personal finances have been a big concern since the start of the pandemic.
President Biden announced today that he is extending the pause on student loans, until May 1st. For those with federal student loans, the pause on payments was a welcome relief, one that now continues.
After taking advantage of the pause on payments last year, this additional extension has Brittany Cannon ready to ease back into paying what she owes.
“Definitely, it was definitely helpful. I am ready, I think. I think I’m caught up with everything so I’m at least ready to start trying again,” Cannon said.
Paris Groves has also taken advantage of the pause on loan payments. After spending some time out of work due to COVID without pay, she looks at her finances differently these days.
“It made me think harder on when I do get my money what to do with it,” Groves said.
As a single mom of four, stimulus payments, and child tax credits were only temporary. Now, Groves is working a full-time job and then some. Groves said her student loans will be on the back burner.
“I do Uber eats and Waitr,” said Groves.
“It would definitely put a damper on things when you are already penny pinching,” said Groves.
Dr. Robert Tennant, professor of finance at Texas A&M Central Texas, says anything you can pay toward those student loans helps.
“It makes it, so you pay less interest along the way,” Tennant said. “So, you get to keep more of your money instead of giving it to the government. With many student loans, the interest continues to compound to become principal to make your student loan bigger during this grace period. So, if you can make the payment during this time, I encourage you to do so.”
He says making a budget is the first step.
“The harder it is to manage your money because you don’t have very much the more complete your budget needs to be because you don’t have any room for waste,” said Tennant.
Tennant says being mindful of your savings is vital. After the pandemic Tennant advises having 12 months of income saved. While that may seem intimidating, he says saving smaller amounts of money over time can quickly and cutting out unnecessary expenses can help.
Monitoring your credit, paying off those credit cards, and setting up an emergency and retirement is a good place to start.
“It’s not hard. It just takes a little bit of effort and consistency over time,” said Tennant.